The Relationship between Democracy and Economic Growth in Algeria: A causal Analysis

Does democracy cause economic growth or does economic growth cause democracy, a crucial question has been investigated by many scholars. The existing literature point out conflicting views in this regard. Therefore, this study aims to explore the causality direction in Algeria during 1999-2018. We delve this problematic by using a Vector Error Correction Model Causality Analysis. Democracy is measured by polity index and economic growth by GDP growth.The study supports the Lipset’srevisit theory and shows that in Algeria democracy causes economic growth in both the short and the long run.